Hi there, novice to Photoshop 7, need help with basics ( resizing an image)

[phoenix6]

Hi guys,
I have joined this forum wishing to get help with resizing images. I am trying to follow a lesson plan...but it doesn't look the way they say it will.
I am trying to make digital collages for jewellery making.
I have bought templates but am having trouble resizing images and need help!
I open the template, drag the image to the back of the template. Using the relevant layer and the move tool. I am told that if I settle the cursor on the corner of the image, it will change and if I hold the shift key, I can resize the image. All it wants do do is move though, the cursor image does not change.
I get some sort of message about the background being locked.....
Confused!!
Hoping to learn some more from you guys!
If anyone can help, please message me.....
Thanks!

[Hoogle]

select the image layer and go to edit> free transform then hold the shift key and drag a corner

[phoenix6]

Thanks so much for your suggestion, I shall try it now!
I really appreciate your time.

[phoenix6]

It is resizing now!!
You have been very helpful, Thanks so much!

[phoenix6]

I have noticed that when I open a new picture and I click on it, the template seems to disappear and the layers palette only shows that image, not all of the other layers. I try to Ctrl + Z Undo but it doesn't come back. Any ideas on how I get it back?

[phoenix6]

I have noticed that when I open a new picture and I click on it, the template seems to disappear and the layers palette only shows that image, not all of the other layers. I try to Ctrl + Z Undo but it doesn't come back. Any ideas on how I get it back?